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Aviation minister rules out privatisation of Air India

New Delhi, Oct 6, 2013, DHNS

Civil Aviation Minister Ajit Singh on Sunday backtracked on his comments that the government was ready to privatise national carrier Air India, saying there is “no intention” to do so amidst an outrage from the opposition ranks.

However, he said the government will not give any more money to the airline after infusing Rs 32,000 crore as part of its turnaround plan.

“After this package, the government will not give any more money. Air India will have to fend for itself,” Singh told a news channel. His comments came a day after his assertion that the government was ready to privatise the carrier.

He said it was very difficult for the government to run a service industry and that employees and the management of Air India will have to understand that aviation is a very competitive market.

“The margins are thin and it’s a capital intensive industry,” he said.

The Air India was nationalised on August 25, 1953 after the government exercised its option to purchase a majority stake in the carrier then owned by Tata Sons. In 2001, there was a bid to disinvest stakes in Air India and Tata Sons along with Singapore Airlines planned to buy 40 per cent stakes.

However, the NDA government had to shelve the disinvestment plan due to political opposition.

Oppn attack

The opposition pounced on Singh for his comments with senior BJP leader Ravi Shankar Prasad warning him against making any “off-the-cuff remark. Underlining the need for a proper discussion first in the government and then with “the Opposition on the issue, he said it is a "serious and sensitive" issue.

CPI National Secretary D Raja described the remarks as “disastrous”. He said the privatisation of Air India would go against national interest.

“While equity was not being infused in AI in accordance with the turnaround plan, Airports Authority of India was also being systematically undermined. This is a conscious effort to dismantle both these public sector undertakings,” he alleged.

CPM MP Tapan Sen said the privatisation of the national carrier would amount to “anti-national” activity. “The UPA government is politically inclined to sell the country,” he said.CPM-affiliated Centre of Indian Trade Union also opposed the minister reminding him that Air India belonged to the nation and was not the property of council of ministers.